CALGARY — Imperial Oil Ltd. (TSX:IMO) reported a 61 per cent drop in quarterly profit compared with a year ago, when oil and natural gas prices were much higher.

The energy producer and oil refiner said Thursday it earned $547 million, versus nearly $1.4 billion booked a year earlier.

That worked out to a profit of 64 cents per share, compared with $1.57 in 2008. Analysts polled by Thomson Reuters were on average expecting earnings per share of 58 cents.

Operating revenues were $5.55 billion, down from $9.5 billion.

The earnings marked a sharp improvement from the second quarter of 2009, when the global economic picture was more dire.

“Imperial continues to weather this economic downturn well, with earnings supporting our investments in company growth projects through the down cycle,” the company said in a statement.

“Our proven approach of focusing on those elements of the business within our control, combined with prudent financial management and disciplined capital investment, will continue to reward our shareholders in these uncertain times.”

Earnings in the upstream, or oil and gas production, segment, were $439 million compared to $999 million a year ago.

The average benchmark price for crude on world markets was US$68.29 per barrel during the quarter, a 41 per cent drop from a year ago.

Downstream, or refining and retail, operations were $62 million, a 77 per cent drop from the $270 million booked a year ago.

“When compared to the same period in 2008, earnings in the third quarter of 2009 were negatively impacted by reduced demand for products,” the company stated.

Imperial also said Thursday it expects to start up the first phase of its $8-billion Kearl project in late 2012. The project’s three phases could ultimately produce 300,000 barrels of bitumen a day.

Since Imperial’s board of directors approved the project in May, design, procurement and construction activities have been underway with a workforce of about 3,000 employees and contractors.

In September, Imperial filed an amended application for an expansion to its Cold Lake oilsands project that will result in improved energy efficiency, lower emissions and a smaller environmental footprint. The Nabiye expansion, if given the green light, could add about 30,000 barrels of oil per day.